Correlation Between Voya High and Highland Longshort
Can any of the company-specific risk be diversified away by investing in both Voya High and Highland Longshort at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Voya High and Highland Longshort into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Voya High Yield and Highland Longshort Healthcare, you can compare the effects of market volatilities on Voya High and Highland Longshort and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Voya High with a short position of Highland Longshort. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya High and Highland Longshort.
Diversification Opportunities for Voya High and Highland Longshort
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Voya and Highland is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Voya High Yield and Highland Longshort Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highland Longshort and Voya High is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Voya High Yield are associated (or correlated) with Highland Longshort. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highland Longshort has no effect on the direction of Voya High i.e., Voya High and Highland Longshort go up and down completely randomly.
Pair Corralation between Voya High and Highland Longshort
Assuming the 90 days horizon Voya High is expected to generate 2.12 times less return on investment than Highland Longshort. But when comparing it to its historical volatility, Voya High Yield is 1.27 times less risky than Highland Longshort. It trades about 0.17 of its potential returns per unit of risk. Highland Longshort Healthcare is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 1,642 in Highland Longshort Healthcare on November 3, 2024 and sell it today you would earn a total of 20.00 from holding Highland Longshort Healthcare or generate 1.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Voya High Yield vs. Highland Longshort Healthcare
Performance |
| Timeline |
| Voya High Yield |
| Highland Longshort |
Voya High and Highland Longshort Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya High and Highland Longshort
The main advantage of trading using opposite Voya High and Highland Longshort positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya High position performs unexpectedly, Highland Longshort can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Highland Longshort will offset losses from the drop in Highland Longshort's long position.| Voya High vs. Thrivent Natural Resources | Voya High vs. Pimco Energy Tactical | Voya High vs. Ivy Natural Resources | Voya High vs. Transamerica Mlp Energy |
| Highland Longshort vs. Putnam Global Financials | Highland Longshort vs. Fidelity Advisor Financial | Highland Longshort vs. 1919 Financial Services | Highland Longshort vs. Blackrock Financial Institutions |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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